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Rick Sharga: Is this the end of the housing recovery?

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Why homebuilder stocks are plunging suddenly

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The decline in homebuilder stocks came a day after the Federal Reserve suggested it may reduce the bond buying that has pumped up equity markets for more than a year, writes Money Morning. Experts noted that homebuilder stocks are particularly sensitive to rising interest rates.

With rising rates, said Money Morning Chief Investment Strategist Keith Fitz-Gerald, "The homebuilders are going to have to do one of two things: They're either going to have to stop building because there's no demand or they're going have to lower their prices, which is going to hurt their profit margin."

Source: Money Morning
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